Sterling Slides on Global Risk Sentiment Ahead of US Inflation Data

The British pound has retreated from its six-month high against the dollar and euro on Wednesday, due to broad risk sentiment and developments elsewhere. The currency shed 0.2% on the dollar to $1.3625, reversing some of the gains it made last week when it hit a high of $1.3675.

The pound has performed relatively well this year, gaining over 1% against the dollar and nearly 2% against the euro. This is attributed to a resilient UK economy and high British bond yields, which are particularly relevant in calm market conditions.

Currency markets were focused on the United States on Wednesday, awaiting key releases that could shape expectations for the Federal Reserve's interest rate path this year. The U.S. PCE inflation gauge is due at 1230 GMT, followed by Fed Chair Kevin Warsh's speech at the Jackson Hole conference on Friday.